World BankWorld BankOil, Gas and Mining WorkOil, Gas and Mining Work

AfricaAfrica

African Development Bank African Development Bank RoundtableRoundtable

Tunis Tunis October 4, 2006October 4, 2006

Michael LevitskyMichael LevitskyLead EconomistLead Economist

Oil, Gas and Mining Policy DivisionOil, Gas and Mining Policy DivisionThe World BankThe World Bank

Africa VPU

President

World Bank: Oil, Gas and MiningWorld Bank: Oil, Gas and Mining StructureStructure

OGM Policy Div.Peter Van der Veen

Sustainable Development

Dept.

Sustainable Development

VPUKathy Sierra

IFC Divs.

Other Regions VPUs

Other VPUs

`Country Dept.Abc, Defg, Hij

IFCOil, Gas, Mining

& Chem. Dept.

Rashad Kaldany

ca. 25 staff

EITI, GGFR, CASM This is a simplified organization chart and is not an

official representaiton of the World Bank’s structure.

Africa: Key Issues in Africa: Key Issues in Oil, Gas and MiningOil, Gas and Mining

General failure to transform resource General failure to transform resource wealth into sustainable developmentwealth into sustainable development• The “Resource Curse”The “Resource Curse”

Rapid growth in oil, gas and mining Rapid growth in oil, gas and mining production and revenuesproduction and revenues• Rising production, higher pricesRising production, higher prices• New producing countriesNew producing countries

General problem of GovernanceGeneral problem of Governance• With deeper systemic issuesWith deeper systemic issues

Macro, institutions, capacityMacro, institutions, capacity

Africa: Growth in Oil, Gas and Africa: Growth in Oil, Gas and Mining RevenuesMining Revenues

65% of all FDI during the 1990’s was concentrated in oil, gas and mining

Between 2000-2010, $200 billion in oil revenue will accrue to African Governments;

The 2004 oil windfall ranges from 9 percent of Government Revenues in Gabon to 56 percent in Equatorial Guinea (and average 21 percent);

WBG Oil, Gas and Mining WBG Oil, Gas and Mining Strategic FrameworkStrategic Framework

Response to Extractive Industries Review Response to Extractive Industries Review (2004):(2004):• Governance and transparencyGovernance and transparency• Benefits for poorBenefits for poor• Mitigate Environmental & Social RisksMitigate Environmental & Social Risks• Protecting communities, local peopleProtecting communities, local people• Promote cleaner energyPromote cleaner energy

Actions included:Actions included:• IFC SafeguardsIFC Safeguards• Increased Project transparencyIncreased Project transparency• WB EI Consultative GroupWB EI Consultative Group

World Bank OGMWorld Bank OGMGlobal InitiativesGlobal Initiatives

EITI (led by UK DFID)EITI (led by UK DFID)• WB Multi-Donor Trust Fund (ca. $8.0m)WB Multi-Donor Trust Fund (ca. $8.0m)

UK, Norway, Germany, Netherlands, FranceUK, Norway, Germany, Netherlands, France• WB works in: WB works in: Cameroon, Congo R., DRC, Ghana, Guinea, Cameroon, Congo R., DRC, Ghana, Guinea,

Mauritania, Niger, Nigeria, Sao Tome P., Sierra LeoneMauritania, Niger, Nigeria, Sao Tome P., Sierra Leone, , Global Gas Flaring Reduction Partnership (GGFR)Global Gas Flaring Reduction Partnership (GGFR)

• Works in Algeria, Cameroon, Nigeria etc.Works in Algeria, Cameroon, Nigeria etc.• Global Conference Dec. 2006, ParisGlobal Conference Dec. 2006, Paris

Communities and Small Scale Mining (CASM)Communities and Small Scale Mining (CASM)• Works in several African countriesWorks in several African countries• Global Conference Nov. 2006, MadagascarGlobal Conference Nov. 2006, Madagascar

Communities and Development (ComDev)Communities and Development (ComDev)• IFC sponsored, works with WB.IFC sponsored, works with WB.

World Bank OGMWorld Bank OGMGovernance ProgramsGovernance Programs

Extractive Industries Governance Extractive Industries Governance FrameworkFramework• Analysis of macro and sector governance Analysis of macro and sector governance

issuesissues• Framework for systematic diagnosisFramework for systematic diagnosis• Pilot countries (inc. Tanzania, Mauritania)Pilot countries (inc. Tanzania, Mauritania)

Oil for Development (with Norway)Oil for Development (with Norway) Mining: Inter-Governmental Mining ForumMining: Inter-Governmental Mining Forum

World Bank OGMWorld Bank OGMAAA Work and ProjectsAAA Work and Projects

Analytical Advisory Assessment Analytical Advisory Assessment (AAA)(AAA)• With Country TeamsWith Country Teams

Sector (e.g. Congo Rep. Oil Sector Review, Sector (e.g. Congo Rep. Oil Sector Review, DRC Mining Sector Study)DRC Mining Sector Study)

Multi-sector (e.g. Country Economic Multi-sector (e.g. Country Economic Memorandum)Memorandum)

Special own studiesSpecial own studies Nigeria LPG (ESMAP)Nigeria LPG (ESMAP) Chad Petroleum Pricing (ESMAP)Chad Petroleum Pricing (ESMAP)

World Bank OGMWorld Bank OGMProjectsProjects

Mining and PetroleumMining and Petroleum• More Mining projects that Petroleum:More Mining projects that Petroleum:

Sector less mature, needs legal and institutional frameworkSector less mature, needs legal and institutional framework Financial burden on state potentially largerFinancial burden on state potentially larger Fewer state companies preventing reformFewer state companies preventing reform

““Typical” Mining Project may include:Typical” Mining Project may include:• Legal, Regulatory FrameworkLegal, Regulatory Framework• Institutional Reform and DevelopmentInstitutional Reform and Development• Cadastre, Geological data developmentCadastre, Geological data development• Capacity buildingCapacity building

Some oil TA:Some oil TA:• Institutional StrengtheningInstitutional Strengthening• Capacity buildingCapacity building

World Bank OGMWorld Bank OGMProjectsProjects

Mining ProjectsMining Projects::• Nigeria (FY05)Nigeria (FY05)• Guinea (ca. FY08)Guinea (ca. FY08)• Mozambique (FY01)Mozambique (FY01)• Tanzania (FY08)Tanzania (FY08)• Uganda (FY04)Uganda (FY04)• Sierra Leone (FY08)Sierra Leone (FY08)• Madagascar (FY03)Madagascar (FY03)• Mauritania (FY04)Mauritania (FY04)

Oil & Gas ProjectsOil & Gas Projects::• Mauritania (FY05)Mauritania (FY05)• Sao Tome Principe (FY04)Sao Tome Principe (FY04)• MozambiqueMozambique

Thank YouThank You

Michael LevitskyMichael Levitsky

Lead Energy EconomistLead Energy Economist

Oil, Gas & Mining Policy DivisionOil, Gas & Mining Policy Division

The World BankThe World Bank

+1 (202) 473 6657+1 (202) 473 6657

mlevitsky@worldbank.orgmlevitsky@worldbank.org